ROXY-PACIFIC Holdings has taken a 20 per cent stake in the consortium started by Melvin Poh of Fission Group which recently signed a deal to buy Marina House at Shenton Way for $148 million.
BT reported the sale of Marina House late last month.
Besides Roxy-Pacific and Fission Holdings, the other three shareholders in the consortium are Macly Capital, Pinnacle Assets and Chee Hsian Sing.
Mr Chee, an architect by training, has been involved in several joint developments with Fission Group. Macly Group was set up by its managing director, Herman Chang, a civil engineer by training. Macly’s property developments include Thomson V and Newton Edge. Pinnacle Assets, set up in 2007, is headed by Victor Soh, a partner in Fortune Development.
All five shareholders in the consortium buying Marina House hold an equal stake of 20 per cent each.
Marina House is being sold by Hong Leong Group, which in February this year, obtained provisional permission to redevelop the property into a 42-storey block comprising about 150 apartments and ground-floor commercial space.
The site has a balance lease term of about 60 years. However, the state has yet to agree to top up the site’s lease to a fresh 99-year term.
The $148 million purchase price works out to about $970 per square foot of potential gross floor area inclusive of an estimated $30 million payment to the state if it agrees to upgrade the site’s lease.
The $970 per square foot per plot ratio unit land price takes into account 10 per cent additional gross floor area (GFA) allowed for balcony space. A differential premium is not payable for the residential conversion based on Sept 1, 2009 development charge rates as the provisional permission was secured before the revision in DC rates that took effect from March 1, 2010.
The proposed GFA inclusive of the 10 per cent balcony allowance would be lower than the building’s existing GFA.
Once the purchase is completed, the consortium will review the scheme for the proposed project. ‘We will seek to increase the saleable area and possibly increase the number of units. We’ll also have to do the detailed designing,’ said Roxy-Pacific executive chairman and CEO Teo Hong Lim.
‘On a worst-case scenario, assuming the authorities don’t approve a lease upgrade on the site (and we hence don’t redevelop the site to residential use), the purchase price of the existing commercial space is below current replacement cost. The $148 million works out to about $740 psf based on existing GFA of nearly 200,000 sq ft. There is scope to increase the lettable area,’ said Mr Teo.
Based on Marina House’s existing net lettable area of about 130,000 sq ft, the $148 million price works out to about $1,130 psf.
DTZ brokered the sale of Marina House.
Mr Poh clinched the option to buy Marina House just days before the preview of 76 Shenton nearby. The 202 apartments were sold out in two days at prices ranging from about $1,600 psf to $2,600 psf. Hong Leong Group is developing the apartments on the former Ong Building after securing a lease upgrade on the site.
Last year, Fission teamed up with Yi Kai to buy the freehold VTB Building along Robinson Road for $71 million. They are also partners in the purchase of Aviva Building in Cecil Street and the next-door Cecil House for a total of $101 million.
Mr Poh told BT yesterday that a 37-storey residential project (with shops on the ground floor) on the VTB Building site is slated for launch by the third quarter of this year.
Source: Business Times, 6 Apr 2010
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